The Wall Street Journal asks Has Trump Inflicted Enough Pain on China Yet?
How much economic pressure is enough to persuade China’s communist dictator Xi Jinping to change his business model? So far his trade dispute with the U.S. is inflicting more financial pain than he’ll admit but not enough to force economic liberalization. This means that to maintain a strong U.S. economy and get re-elected, Donald Trump needs a plan B for trade expansion if Beijing disappoints him again at the bargaining table. Cutting a soft bargain with the rest of the world would drive a resurgence in U.S. business investment. Slashing U.S. tariffs on goods coming from places other than China would also exert even more competitive pressure on Beijing.
The article accurately point out many ways China is suffering.
It also notes “The U.S. is also suffering from the trade fight.”
It is the second point that matters most.
I discussed China four days ago in China’s Growth Much Worse Than Reported, What About the US?
Recall that for over a year Trump insisted that China work out a comprehensive deal.
Guess who caved. It was not China.
Swing States
A Fox News Poll shows Trump Nine Points Behind Biden in Wisconsin, a key swing state.
The same is happening elsewhere.
Manufacturing Alarm Bells
On Thursday, I posted Manufacturing Alarm Bells Ring on Unexpected Weakness
Not One Thing
- Boeing: This isn’t new news, but it is reflective of Boeing’s 737 MAX problems. The WSJ reports Airbus is Set to Overtake Boeing to become the world’s largest plane maker by deliveries.
- GM: On Day 38 of the strike, the WSJ reports UAW Workers Are Tilting in Favor of New Contract With GM 46,000 GM workers who have gone without a company paycheck for six weeks. GM promised sweeteners such as plant investments and escalated pay. But what if sales flounder?
- Ford: There was no strike at Ford. But yesterday, the Detroit Free Press reported Ford Earnings Dip 57%. The company blamed warranty costs, China, and incentives. CNBC reported Ford’s Shares Slide on Lower Year-End Guidance, Weak Demand in China.
- Caterpillar: CNBC reports Caterpillar Earnings Badly Miss the Street, Cuts Forecast Again
- China: Trump’s trade war with china is taking a toll. Every company above is impacted in some way. So is Apple and many other manufactures.
- EU: Trump is also feuding with the EU and threatens tariffs on German cars. Meanwhile, the EU and UK still have not sorted out Brexit.
Plenty of Blame
The slowdown is not just one thing. There’s plenty of blame to spread around.
GM and Ford are both rated Junk by one rating agency. A further slip will force investment grade bond funds to sell.
With elections pending, China can be patient, Trump can’t, but he has dickered around so long now, whatever he does may just be too little too late.
I am not trying to pin this all on Trump, but he certainly didn’t help.
Trump desperately needs a trade deal with China, more so than the other way around.
The WSJ asked the wrong question.
Mike “Mish” Shedlock
Poor Fraudzilla just cannot catch a break on the impeachment front.
Mish is so funny! His religion is himself. Nothing is more important than cheap imports. If it hurts others, Mish doesn’t care as free trade and what’s best for Mish is the most important thing.
It’s kind of like the skit from Saturday Night with Al Franken. “what’s best can be determined by what’s best for Al Franken.
No moral compass just like the NBA and most large corporations.
If China has concentration camps and harvests organs from prisoners, oh well. That’s good for those needing organs!
For the US to demand liberalizations from China is the same as if China were to demand less liberalization in the US, or less social inequality. The US is demanding measures at odds with the very principles that guide the concept of society and social development in China. China will never enshrine the priority of so-called “market forces” above all other values.
The Chinese don’t buy the “unfair trade” argument the US foists on them. They see themselves as engaged in a historical race of catch up to the modern world and assuming their rightful place in the scheme of things. They are unlikely to cede on any issues which do not make sense to them.
As for Trump, he owns the winds of economic acceleration/deceleration, even though he has just as little control as he does over the weather. Substantive deals (“capitulations”) may improve sentiment, but will not change economic circumstances quickly enough to influence Nov 2020. His only hope right now is if his narrative is less objectionable than the Democrat narrative. Just as in 2016, people will be voting for the party that summons the least aversion, not the one that elicits the most support.
You have an uncommon insight into the Chinese. Our media keep harping on the evils of an authoritarian government. Those who live in mainland China have lived under an authoritarian government for about 4000 years. Ain’t nothing new there. They are used to it and they live their lives happily, for the most part, in spite of it. I wouldn’t enjoy living there, but they don’t mind, and like in our country, many have gotten wealthy.
Choose the least worst, you’re right but what a state of affairs.
I hate the word tariff. It is a TAX and any libertarian, Republican, or conservative should knowtaxes kill economies. Period
Those who bring up TDS at every disagreement with Trump are the ones who are afflicted with some sort of disease.
My policy on free trade is well understood, and I am one of few who support trump pulling troops from Syria.
You TDS accusers ought to look into the mirror to see who has a problem
I find it both funny and ironic that so many Trump voters believe that “this time it’s different,” and now blindly trust a politician and his vague “MAGA” promises. It’s especially ironic since so many of them are posting on economic forums (like ZeroHedge) that used (!) to have a libertarian viewpoint of self-reliance and independence that is directly opposed to Trump’s love for militarism, hiring of neocons, central planning by lowering interest rates, more central planning by restarting QE, starting trade wars by imposing tariffs.
Trump voters seem to have suddenly embraced the general idea that ‘the right kind of politician’ combined with central planning and a police state, can make everybody rich, free and prosperous. It won’t, just like the Germans and Russians found out the hard way in the 1930’s with Hitler and Stalin.
When one objectively looks at the facts and accomplishments of Trump’s ~3 years on office, then one can clearly see that Trump has not even attempted to reduce government spending, has not even attempted to reduce the size of the government, has not even attempted to reduce the role of the MIC, has not even attempted to reduce the influence of big pharma/banking corporations, and has not even attempted to reduce/stop the spying of the NSA & social media giants on ordinary US citizens.
In other words: Trump = business as usual for the root cause of the problems, which was why regular folks voted for Trump in the first place, namely “drain the swamp.” I’m not so sure they will make that same mistake again in 2020…
You may remember That Trump offer free trade to the EU if they dropped all tariffs, duties and subsides at an early G7-they refused.
Trade with China has never been free as they require IP rights and ownership rights exclusions etc. TRUMP IS A FREE TRADER but we have subjected our population to job losses to UNFAIR traders in the rest of the world due to our Politicians taking bribes via foundations .Childrens jobs etc. previously to TRUMP
GLOBALISATION…….A blessing, it was supposed to be…
The only unfair trade deals that get done are not deals but coercion and require (the threat of) violence.
The EU has offered to remove all tariffs on automobiles and trucks if the US did as well. No takers. The weighted tariffs the EU charges on US products is very close to those for the opposite direction. US tariffs on light trucks are much higher (and have been for decades) than European tariffs on automobiles.
As for subsidies, those are difficult to discuss because of different interpretations on “subsidy”. Europe considers the MIC to be a giant subsidy. The US is adding to agr subsidies to compensate the sector (not the “farmers”) for the damage from trade tariffs. US has huge agr subsidies, but considers Canada’s market boards to be unfair even though there is no government flowing into them. Differences in taxation (exemptions) policies are also considered to be subsidies.
the black messiah with his ghost written, teleprompted, articulate, yet empty speeches…..ahh , those were the days ! …. and the debt merely DOUBLED during Obama’s presidency….so Trump still got some way to go, Hasn t he?
Again, look at the facts: https://www.businessinsider.de/trump-national-debt-deficit-compared-to-obama-bush-clinton-2019-2?r=US&IR=T
“In raw terms, Trump added the second-most debt of any recent president. According to the Treasury data, the US added $2.07 trillion — $2,065,536,336,472.90 to be exact — in new debt between Trump’s inauguration on January 20, 2017, and February 11, when the country pushed past $22 trillion. (The US added another $2.8 billion through February 15, the latest daily figures available.)
That is less than the $3.46 trillion added between Obama’s inauguration in January 2009 and February 11, 2011, but it is more than the $676 billion added under Bush and the $617 billion added under Clinton in their first 752 days as president.
One important difference between Trump’s debt figures and Obama’s is that Trump has added a massive amount of debt while the US economy has been strong, whereas Obama took over during the depths of the financial crisis.”
under Obama from 8 to 16 trillion…..if Trump gets reelected he can take insanity to 32 trln …….btw , this situation has got nothing to do with Trump, it is just can kicking to keep a debt bloated financial ponzi system from falling apart … it will eventually ….fall apart I mean…..but no president wants this to happen when he s in charge …. 200 TRILLION by 2040 ???
Why are you spouting nonsensical figures? Obama should be easy to discredit without resorting to pulling numbers out of your wherever.
Your whataboutisms do not excuse Trump’s profligate spending, and you should have learned long before now that both the red/blue teams are awful. Why carry water for one when you could be correct in bashing both?
As usual Mish, you are correct. TDS is projection.
“The article accurately point out many ways China is suffering.
It also notes “The U.S. is also suffering from the trade fight.”
It is the second point that matters most.”
What matters most is that U.S. corporations have helped build the next Chinese Empire.
Go in any store and read the label of items on the shelf. So many say “made in China.” What would happen if some day China was to suspend all trade with the U.S.? What will happen when some coming day the Chinese government is militarily ready to take Taiwan by force?
‘What matters most is that U.S. corporations have helped build the next Chinese Empire’
Bravo!
Exactly!
I have been pointing this cruel fact (at WSJ++) but Financial media and the Wall st are in denial. B/c they are the beneficiary of these policies. Top 10% own 84% of Wall st wealth!
China didn’t take our jobs but US Multi-Nationals gave it away to exploit the cheap labor and increase the profit!
Mobile Capital (globalists)is winning and the home locked labor is losing!
“What matters most is that U.S. corporations have helped build the next Chinese Empire”
Great. We have found someone to blame it on. Now what?
The Tariff Strategy, though imposing some pain domestically, imposes far more pain on our adversaries. Those with TDS refuse to see this, even when those enemies make concession after concession in our favor.
Do we want to make this policy permanent? No! And Trump has relaxed them whenever the adversary came into a more accom0odative stance. Those with TDS are so blinded by their hatred that they simply cannot see progress.
Trade only takes place if there is a win-win proposition. You don’t do trade with adversaries, since trade is by definition mutual cooperation. Losing less badly than your adversary is generally an exercise in self-delusion. Tariffs impact individual businesses and consumers. In aggregate, both China and the US are much less dependent on their mutual export/import than it is made to seem.
I am sorry you have TDS. I hope you recover.
I agree with Mish when looking at tariffs in isolation of all other aspects of society. The reality is aspects of society overlap. Leaders are generally sociopathic, and want to acquire larger spheres of influence. Those leaders look at the big picture, the system, and understand how all these aspects interact so they may gain power. Manufacturing offshore creates a military vulnerability as the supply chain of parts can be disrupted. And the skills to make those parts also decay. Energy supplies is another way to influence a nation that cannot power its military. People have to eat. so food exports can be used as method to influence a nation. Finance systems use debt to coerce nations. If Trump is able to reverse some of these foreign influences over America, then he’ll avoid a military invasion of the US.
Aren’t you guys abuzz with Trump’s bigly announcement later this morning? Word is Trump gets to recreate Obama’s lame “I killed Bin Laden” moment with al-Baghdadi, something that would have exactly zero impact. Maybe another sea burial is in store?
I’m an optimistic guy, so instead of that nothingburger I’m hoping for a real announcement, something like Brawndo choosing to locate their first factory in Indiana, or maybe Costco founding their own law school!
Al Bagdadi is almost certainly an Intel guy. I don’t believe a single thing ever printed about anything in the Middle East. That way I know am right 90% of the time, even though being ‘right’ means: have NO idea what on earth’s going on over there!
If Al B hadn’t exploded himself, he would be golfing with Trump within a week.
Something very fishy going on.
China’s biggest risk is the brain drain that China caused via their own actions in Hong Kong…. and the slower (not zero, not negative, just slower than the last two decades) economic growth will lead to “social disharmony” as Beijing likes to label it.
The USA’s biggest risk is the expectation of endless free sh!t from people indoctrinated by the socialists academia — and the debt bubble that results.
There is no concession the US can offer that would address China’s problems. There is no concession China can offer that would address the US’s problems.
But Mish has a raging case of Trump Derangement Syndrome, so he’s going to whine about that instead.
You don’t seem to know what TDS is. It is not criticism of Trump. It is the irrational hatred of Trump for being (in some ways, in some hours) an impediment to the left’s desire to sacrifice the US to the rest of the planet and become a lawless, racist, fascist-socialist state of goodthinkers who can’t think. The best recent example of TDS is the supposedly pacifist left going bananas that he directed some US troops away from the bullets flying in Syria.
Actually TDS has no one definition, that’s just the closest one can get while pretending it’s an objective concept and not a smear.
First you accuse me of not knowing what TDS is… then you admit there is no definition and you don’t know either!!!!
Mish does have an irrational hatred for Trump. It may be less bad than the media outlets, but its still irrational.
There is nothing Trump or Xi or Putin or any of the other boogey men (or women) can do to fix a flawed trade system. The Chinese need to export constantly, because they do not have a domestic market capable of being the global consumer of last resort. China wants capitalism’s benefits (economic growth), but doesn’t want to allow economic freedom. It is irrational for Mish to blame Trump for this.
The USA lives trillions of dollars per year beyond its means, and is borrowing the difference. This has been going on since the baby boomers came of age in the 1960s. Academia continues to indoctrinate students into believing socialism won’t f@ck up the USA the way it did everywhere else it was tried. Again, it is irrational for Mish to blame Trump for this.
There are plenty of things Trump is doing that is his doing, and it would be rational for Mish to blame Trump for those things… but he doesn’t.
Mish has Trump Derangement Syndrome. Yes, many of his non-US commenters have it worse. Yes, many in the media have it worse. But having a mild case of TDS doesn’t change the fact that he has TDS.
Mish voted for Trump. What the fuck are you talking about?
TDS is blind petulant support for Trump in the form of projecting that character flaw onto those who aren’t under that spell.
I like that. IMO Trump is a creature of the left (or “progressives”; I would say “libtard” but apparently that insults some people on this libertarian blog!). The left created this Frankenstein. He is the perfect incarnation of their fears: a powerful white man who isn’t afraid to say that all of their values are fake.
“There is no concession the US can offer that would address China’s problems. There is no concession China can offer that would address the US’s problems.”
That’s why I think what is being negotiated is more of a divorce than a partnership. It’s Great Game stuff, playing out rather more perfectly than usual. A budding Maritime Alliance with English-speaking diaspora + Japan and maybe Brazil, versus Eurasia with China-Russia already mutually interdependent symbiotes, all the -stans in play, Iran, and once the UK is out, most likely the United States of Europe making the Eurasian Union complete, using a more central-planning type model than the Maritime Alliance.
(I think this is partly why Macron wants the UK out, because they would always resist this sort of alignment, on all sorts of levels.)
More positive Moscow-Berlin developments are going to be a tell in this regard, I suspect. Long overdue.
Come on Bob,
That’s just not true. Sure, Mish can be critical of Trump, which is perfectly normal and healthy. If he’s indeed your Lord & Saviour, surely he can withstand criticism….right?
TDS is what you see on CNN/MSNBC/Twatter where EVERY SINGLE THING Trump does, is spun around and somehow they concoct a narrative to discredit him, ridicule him or delegitimize him. Of course, most if not all is bullshit propaganda or virtue signalling coming from the mouthpieces for the Democratic Party. Especially from the media which is predominantly left-wing, highly insincere and often cuckoo crazy.
You just cannot compare Mish Shedlock frequently criticizing Trump’s policies or tactics, to the musings of the TDS inflicted lunatics as mentioned above.
Surely, you should give credit, where credit is due whenever anyone asks legitimate questions about how the world’s most powerful leader is handling things.
I too applaud him for not being a warmonger and his decision to bring troops back home. And I can certainly appreciate how he’s trying to negotiate better trade-deals. But he’s not infallible and he doesn’t seem too concerned about the debt issue. And every time he mentions the stockmarket I wish he’d be more concerned about the average Joe, rather than those Wallstreet pricks. Am I now suffering from TDS too?
“A Fox News Poll shows Trump Nine Points Behind Biden in Wisconsin, a key swing state.” Not that I give credence to Faux polling but I get daily updates on the economy from The Daily Shot Editor and they had an interesting chart October 23. Unemployment has bottomed and now turned up in Wisconsin, Kentucky, Mississippi, Delaware, and Nebraska, and the chart looks exactly like the weeks before the GFC started in 2008. This was a WSJ chart.
Then there is the headline that Trump personally ordered General Mattis to screw Amazon out of that $10 billion cloud contract. Not sure if criminal liability is going to be found in that, but legal or not it stinks to have a so called president interfering with business because of a person vendetta.
China is going to weather the trade war, they have dealt with FAR worse, in the end we will be worse off than when it started and people will rue the day they ever heard the name Trump.
Prediction: Tariff man will be the first “president” impeached more than once. He just can’t stop committing high crimes and misdemeanors.
Name one.
An impeachable offense is one in which an indictment is secured by the House and a conviction is secured by the Senate.
Until and unless that happens, Trump’s impeachable offenses remain undefined, but far more hypothetical than imaginary as you suggest.
This impeachment process looks like a joke. Pelosi is still looking for a reason to start the process. Russia was pure stupidity so Democrats moved on.
Yeah, but he went against the neocons of late so they might just hold this over him until they get their bombing runs back and put the President’s training wheels back on. After all, why should he be different from all the other ones since JFK?
Mish, take the blinkers off on this, the truth is that once those in government start talking — its because they fear the process more than they fear Trump reprisals…that’s usually a bad sign. BTW the GOP will NEVER vote against Trump, they are far more afraid of their primaries voters than they are of Trump. The GOP core agrees 100% with Trump
A lot of Republican Senators are in a pickle:
The economy been dead(collapsed) in the water for a decade,hello!This is lost decade on roids,economy is co-opted by the central banks,they own /control virtually everything in this artificial (fake)economy where pretending everything is “booming”is far easier than confronting and fixing the myriad of issues out there.Only question left is when agent Smith knocks and orders you to come with him,how many will comply?
I can also apply another angle to it. If Trump was a lifelong dictator, would he have to care about all this nonsense? If democracy cannot take a short term pain for a long overdue course correction, what purpose does it have in history?
Is this the right fight, though? I’d much rather get the federal budget under control. After railing on Obama about deficits, it turns out that he’s just as bad.
He cannot inflict pain upon himself as he lacks a single feeling bone in his body.
Milton’s Devil had more empathy than The Dumpster®.
I’m astonished what little insight you have into the people who support Trump. Outside of smug pejoratives and a mountain of self righteousness, you, still today, haven’t a clue why he gets the support he does.
If the economy shrank and MY job was lost in order to get a long term deal with China, I would still be on board. Enough of the short term thinking. I’m sick and tired of the whining, country club, free trade “Americans” demanding their needs come first.
Contrary to what most people may believe, China wants Trump to be re-elected. That’s the surest way to keep the U.S. in the mess.
China’s just gonna let him twist in the wind. They know any deal with him is meaningless.
Yes, trump is proven to change his mind even within the same day
Saying and doing stuff impulsively, only to turn around and take a completely different tack, is what is commonly referred to as “mindless”. So the term “change his mind” does him too much honor.
Just as blind people are unaware of what they don’t see, stupid people are ignorant of what they do not know, and are impervious to any attempt to improve their grasp of things, hence the term “studied ignorance”. As the saying goes:
«Trouble is, them what needs teaching most, can’t be learned.»
And on the topic of sayings about “larning”: